Are single franchise dealerships going to be an increasing reality of the future?
When it opened its doors in June this year, David Cole managing director of Lely Turfcare, who were in charge of the Toro products at the time before they moved to Reesink, said of the single franchise branch, "This is a hugely positive development for our customers, the region, and the company."
He continued, "Our priority is always with our customers and this move will provide them with access to our own experts in their fields, offering advice and guidance straight from the manufacturer and distributor, but with a local perspective; plus, direct access to maintenance and servicing, and operator and parts support as well."
The creation of the branch was described as being at the heart of the manufacturer's new 'direct-route-to-market strategy' for Toro products in Scotland.
So one can see why a single franchise dealership would be desirable for a manufacturer, with no other brands to detract sales away from their own machines. And their belief that it benefits customers who will only deal with staff who purely specialise in that particular franchise certainly has a logic to it.
But does it benefit dealers? In this particular case three Scottish dealers had to relinquish their Toro franchises in order to make room for the service branch to be established.
So whilst a natural inclination might be to question how beneficial to dealers a single franchise outlet is, I was very interested to read an article in the American trade magazine Green Industry Pros recently, in which a dealer truly advocated this business model.
The article, which you can read in full
here, profiles Out Front Power Equipment who are located in Fargo, North Dakota. The dealership has been an exclusive Walker mower dealer since 2004, only recently adding a second line, Ventrac.
The dealership's general manager Nick Arndt tells the magazine, "When you look at this industry, game plans for success are far and few between compared to other industries. All dealers are different and most lack one important ingredient, focus - a focus on product, service and customers."
Nick believes that focusing on a single brand, as well leading him and his staff to become true experts on those machines, also has cost benefits to his business. He says, "As a dealer, you don’t have to send technicians to a half dozen service schools around the country, only one or two. You don’t have to stock parts for several brands, nor do you spend as much money on marketing and merchandizing as you would with several brands."
And the approach is apparently certainly working for him. Nick reports that sales are strong and continue to grow, telling the magazine that revenue has increased by more than 50% over the last two years alone.
So will this be a pattern which will start to become increasingly common over here? One would imagine that established dealers would be fairly unlikely to change to just stocking a single franchise. But I could see that new dealerships starting up might see the approach as a way to differentiate themselves from local opposition?
Watch this space . . .
